MARKET TREND FOR TODAY
April 19, 2012
The Markets consolidated yesterday after
Tuesday’s up move as it pared some of its gains after a positive opening and finally
ended the day with moderate gains. The Markets opened positive following
positive global cues, but gave its
intraday high of 5342 in the morning trade itself. After opening positive, the
Markets saw some low volume profit taking as it drifted and remained in
slightly falling trajectory. It basically found resistance at the 50-DMA and
after drifting for the entire session,
bit by bit on low volumes, it
finally ended the day at 5300, posting a
minor gain of 10.30 points or 0.19%. In the process, it has formed a higher top
and higher bottom on the Daily High Low Chart. At Close, the 50-DMA which is
5338 today, has acted as resistance.
Today, consolidation is expected to
continue as the Markets are likely to open on flat to moderately positive note
and look for directions. The intraday
trajectory would be critically important, all lead indicators and F&O data
point towards underlying trend remaining intact.
For today, the levels of 5338 and 5380
shall act as immediate resistance on the Charts and the levels of 5278 and 5240
shall act as immediate supports.
The RSI—Relative Strength Index on the
Daily Chart is 51.7928 and it is neutral as it shows no negative divergence or
failure swings. The Daily MACD, however, has reported a positive crossover and
it now trades above its signal line and it is bullish.
The NIFTY Futures have added nearly 8 lakh
shares in Open Interest and Stock Futures have added little over 3 crore shares
in Open Interest. Nifty PCR stands at 1.12
with significant room on the upside.
Having said this, it is important to note
that as we have been explaining in our previous editions, there is no breakout
or breakdown on charts and the Markets continues to remain in a consolidation mode
due to the reasons mentioned above. So, the conclusion is that the Markets do
have a positive bias but has a statistical resistance at 5338 in form of 50-DMA
and further in the range of 5400-5420 levels. So, until the Markets moves past
these levels, we will keep seeing movements like that of yesterday due to
profit taking activities, but still keeping the underlying trend intact.
All and all, it is advised to continue to
remain stock specific while avoiding aggressive positions. Short should clearly
be avoided. Any weakness should be used for selective stock picking, while
continuing to protect profits at higher levels. Overall, cautiously positive
approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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